Soap maker PZ Cussons has reported a fall in half-year operating margin due to high costs, although price increases pushed up profit.
Shares fell about 6% to 202 pence in early trading after its adjusted operating profit margin of 9.9% came in below a market consensus of 10.4%, according to Barclays analysts.
Low Consumer Confidence
The maker of Imperial Leather soap and Carex hand wash said its operating margin for Europe and the Americas market declined due to low consumer confidence in the UK and softer demand for hygiene products post-pandemic.
The Manchester company, which also makes self-tanning products, said adjusted pre-tax profit rose to £34.5 million ($41.5 million) in the six months that ended 3 December from £32 million a year earlier.
The company, however, left its full-year outlook unchanged and projected margins to improve in the second half as cost inflation eases, and the full impact of price increases will be realised.
Challenging Macro Environment
Chief executive officer, Jonathan Myers, said, "Despite the continued challenging macro environment, we have delivered another quarter of like-for-like revenue growth. Our first half performance has been in line with expectations and we are reiterating our full year outlook."
"This is thanks to work we have done to make PZ Cussons a more resilient business and our focus on building stronger brands. For example, in the UK, our new brand Cussons Creations is serving cost-conscious shoppers and the re-launched Sanctuary Spa is for consumers looking to treat themselves at home with an everyday indulgence," Myers added.
News by Reuters, additional reporting by ESM – your source for the latest A Brands news. Click subscribe to sign up to ESM: European Supermarket Magazine.